Sentiment improved further after European Central Bank chief Mario Draghi reiterated that the central bank is not looking to halt its crisis measures. He added that the eurozone is seeing a slow recovery which will pick up in the second half of this year.

Markets also cheered at Federal Reserve Chairman Ben Bernanke's reassurances on the central bank's stimulus plans at a second congressional testimony. Minutes of a recent Fed meeting that showed differences among members had sparked widespread concerns on the quantitative easing measures.

But US economic concerns persist as the so called "sequester" looms and automatic spending cuts worth $85bn kick in.

Banks across the region are likely to be in focus during the day after European Union leaders' decision to cap top bankers' bonuses.

Earlier in the day the Japanese government nominated the Asian Development Bank chief Haruhiko Kuroda as the successor to Masaaki Shirakawa, who will step down next month. The decision is along expected lines as Kuroda's pro-stimulus stand and international network are seen as the right combination for the government's stimulus plans.

The news weakened the yen, which had showed signs of firming early this week after the Italian election results brought fresh eurozone concerns. The currency climbed to 92.38 during the day from the 90.85 touched earlier.

The Japanese parliament is set to vote on the nomination next month.

Meanwhile, official data showed that Japan's industrial output improved for the second month in January, underscoring the effectiveness of the government's stimulus measures. Output rose1 percent from the 2.4 percent recorded in the previous month.